ENG-2003 — Page 255

HOUSING

Rent Allowance Schemes

The Rent Allowance for Elderly Scheme was launched as a pilot scheme in August 2001 to give elderly applicants an arrangement to receive cash rent allowances to lease private accommodation in lieu of PRH allocation. Upon implementation, the pilot scheme attracted only a lukewarm response. Out of the total quota of 1 100 allowances in the two-year trial period, only about 620 were utilised. The HKHA therefore decided to phase out the scheme in September 2003 by ceasing to accept new applications. Existing beneficiaries, upon expiry of the current private leases, can opt for PRH units or continue to receive cash rent allowances provided that they still meet the prevailing eligibility criteria.

Divestment of Commercial Properties

To concentrate on its primary mission of providing subsidised public rental housing to people in need, the HKHA announced a plan to divest its retail and car parking facilities in 2004-05. Proceeds from the divestment would help the Authority to tide over its financial difficulties resulting from the cessation of the HOS, thus allowing it to pursue various measures to improve its finances in the longer term.

Home Ownership

Sale of Subsidised Flats

Since 1978, over 422 0005 subsidised sale flats have been sold to households of eligible families/persons at discounted prices under the Government's various subsidised home ownership schemes. Among these were the HOS, the PSPS and the Tenants Purchase Scheme (TPS) under the HKHA. Given the significant changes in the economy and property market over the past few years, the Government believes that home ownership should essentially be a matter of personal choice and affordability. In this respect, the Government has come to the view that it should withdraw from its previous role as direct housing provider and refrain from competing with the private residential market. Furthermore, it should facilitate eligible families/persons to become home owners through the more flexible and well tested means of loans. Accordingly, the HKHA has decided that, with the exception of a limited number of unsold and returned_HOS/PSPS flats to be sold to Green Form applicants, the production and sale of HOS/PSPS flats would cease indefinitely from 2003 onwards, and the TPS would halt following the sale of the TPS Phase 6. In November 2003, the HKHA further accepted the Government's proposal for not putting up the above unsold and returned HOS/PSPS flats for sale before the end of 2006 in order to give a clear signal of the determination to minimise the Government's intervention in the property market.

Home Assistance Loan Scheme

Following the withdrawal from the direct provision of subsidised sale flats, the HALS has become the principal means for offering assistance to eligible families/persons aspiring to become home owners. The HALS, with a quota of 10 000 for 2003-04 equally split between White and Green Form applicants, provides home purchase assistance towards down payment and related expenses, in the form of an interest-free

5 Of the 422 000 flats sold since 1978, 46 900 flats can be traded in the open market as at-end December 2003.

These flats are not counted as subsidised sale flats under the current definition.

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